Ann: Rights Issue Offer Document , page-2

This company is now officially a basket case IMO:

Sydney - Thursday - April 22: (RWE Australian Business News) -
Freshtel Holdings Ltd (ASX:FRE) is to undertake a 1-for-1 pro-rata
renounceable rights issue at 0.375c a share to raise up to $1.59m.
Shareholders will have the right to apply for shares in excess
of their entitlement under a shortfall offer but the maximum amount to
be raised under the rights issue and shortfall issue will be $1.59m.
Record date for participation in the offer is May 5.
A maximum of about 424.59m new shares will be issued under the
offer, which is not underwritten.
The offer price represents a discount of 46.4pc to the last
price at which shares in the company traded on ASX prior to the
announcement of this offer.
Proceeds will be used to provide working capital, reduce debt
and position the company for acquisitions of interests in new projects.
The company will apply $326,985 towards retiring part of the
debt provided by Custodial Capital Management Pty Ltd.
Freshtel also announced it had agreed to place 55.17m shares at
0.375c each to raise a total of $206,897 being the maximum allowed under
Listing Rule 7.1.
The placement shares are expected to be allotted on April 27 and
will participate in the rights offer.